On Monday, Governor Janet Mills and her administration revealed they would not match the federal tax law changes exempting struggling businesses from being taxed on PPP loans or allow the new PPP deductions to serve as additional stimulus as Congress intended.
Governor Mills justified this decision by claiming her administration could not afford to cover the $100 million of tax revenue that would be lost by matching federal tax policy. The Mills Administration needs this $100 million to keep the current fiscal year’s budget balanced—the second half of her two-year budget that increased state spending by $800 million.
BUT MAINERS MADE THEIR VOICES HEARD. THANK YOU FOR SPEAKING OUT!
In her first response to the public outcry, she tried to shift the blame to the feds. Her administration put out a statement Monday afternoon claiming that the federal government had not given the state enough aid, so Maine couldn’t match the tax code changes.
Then, late this afternoon, Governor Mills put out a statement indicating she MIGHT reverse this position IF she can find enough federal money to shift her spending onto.
Note: Governor Mills has merely asked her departments “to explore whether Federal funding may exist to help Maine provide the same beneficial tax treatment to PPP funds that the Federal government has.” Governor Mills has made no commitment to matching the federal PPP tax laws in her statement.
It’s her own massive increase in spending that Governor Mills has to pay for—a problem she created and for which she needs to find a solution.
Her first solution was to make distressed businesses pay. Now, she hopes that the federal government will get her out of this jam. And if the feds don’t, she’ll continue to place the blame on them. Not on her own spending.
Janet Mills should not fund her massive increase in state spending on the backs of businesses trying to stay afloat.
Today’s statement from Governor Mills does not include any specifics or recommend spending cuts to help make this tax policy a reality for businesses.
MPBP will continue to monitor this issue.
Continue to reach out to your legislators and Governor Mills, urging them to fully match the federal tax code.
Providing an additional lifeline to our small businesses is the right thing to do.